After a better start at 21,222.19, the 30-share Sensex rolled back gains to close lower by 30.20 points, or -0.14 per cent, and end at 21,140.48 today after 15 constituents closed down. The broad-based National Stock Exchange index Nifty today declined by 2.35 points, or -0.04 per cent, to close at 6,301.65 today, after touching an intra-day high of 6,327.20.

Yesterday after market hours, government data showed India's fiscal deficit touched Rs 5,09,557 crore during April-November, or 93.9 per cent of the annual target. Additionally, core sector growth slowed to +1.7 per cent in November from +5.8 per cent a year ago, dampening sentiment.

This is the first drop for the benchmark on the opening trading day in seven years. On January 2 in 2006, Sensex had ended lower by 7.8 points.

The Indian rupee continued to remain weak due to dollar buying from oil importers. The rupee was last seen quoting at Rs 61.90 compared with previous close of Rs 61.80 per dollar. Currency dealers believe the weakness will be limited as the RBI may step in if the rupee falls below 62.

Asian markets were closed for trading on New Year's Day. Meanwhile, factory growth in China remained subdued in December 2013. According to the National Bureau of Statistics, the Purchasing Managers' Index dipped to 51.0 in December 2013 compared with a reading of 51.4 in the previous month.

Nifty may hit 6,450 in the short term and 6,700 in medium run, says expert. Most sectoral indices are poised to usher the Nifty into newer highs, the levels never seen before. A new base formation around the 5,400 level has been created in the recent correction and one could trade the long side with these numbers in mind, they add.